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Court Limits Right To Sell Used Software

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I posted a year or so ago on Labours plans to tax car boot sales. Given the decimated high st. sales, I see more of this type of thing happening.

As a recent Uk report revealed that car scrappage scheme had not increased the enviro benefit in the Uk. Perhaps that stood as the biggest anti-used goods endeavour.

US Court limits right to sell used software


The Ninth Circuit court ruled today that you do not have the right to sell used software if the license agreement forbids it. The case centered on legitimate copies of Autodesk sold second-hand on eBay, but the ruling spells trouble for any business (e.g. GameStop) that relies on America's increasingly cold-to-the-touch doctrine of first sale. [Ars]

No, you don't own it: Court upholds EULAs, threatens digital resale

Main article & legal detail link

The case is Vernor v. Autodesk, in which Timothy Vernor made his living from selling items (including software) on eBay. Vernor had picked up some old copies of AutoCAD from an architect's office sale, complete with their serial numbers, and he put them up on eBay noting that they were not currently installed on any computer. Sounds legal, right?

But there's a catch. Autodesk, the software's developer, forced all users to accept an agreement before using AutoCAD. This agreement made clear that AutoCAD was merely licensed, never sold, and that one's license was non-transferable. Further, a licensee could not rent, lease, or sell the software to anyone else; you couldn't even physically transfer the discs out of the Western Hemisphere (!). Finally, if you upgraded to a new version, the old version had to be destroyed.

The copies Vernor picked up at the architect's sale were old copies that had not been destroyed as required. Vernor believed he was in the clear to resell them, as he had not agreed to any license. But after putting them on eBay, Autodesk repeatedly tried to shut down his sales. Vernor, on the verge of getting banned from eBay,sued Autodesk and asked the court to declare his sales legal.

A federal court did so in 2008, but Autodesk appealed, and today the appeals court reversed that earlier decision. In its view, US "first sale" protections don't apply to Vernor, because he didn't buy the software from a legitimate "owner." That, in turn, is because the architecture firm had only "licensed" the software, and that license could indeed allow a software company to prevent resale, lending, and even removal from the Western Hemisphere.

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The downturn has driven money that would have been spent in the primary (new) markets, into the secondary (second hand) markets.

Every avenue must be pursued to retain and increase profit. It costs next to nothing to add restrictions the product license, the threat of prosecution is enough keep the public doing as they are told.

We want those customers coming back, year after year.

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Now that desktop and laptop computers have pretty much peaked in terms of technological advances. Intel should start making chips that have a licenced lifespan of 12 months. After that, you must make an online payment to renew it for another 12 months.... rubs hands....

Edited by Money Spinner
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If your business sells a product that is a one off, it is a doomed business.

Look at who succeeds in:

The Pharmaceutical Industry

Information Techonology

Real Estate



Consumer Products

The Automobile Industry

The list goes on. Rent must be continually seeked by the rent seekers.

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Autodesk have always been SOBs when selling on software.

Way back in he 1990s when they had autodesk dongles which you had to plug into the back of your machine to get 3DS3 working it was forbidden to sell the software. Anything on ebay was removed almost immediately.

Instead what happened is people created shell companies with just the software as an asset and they sold the company on to another person to get round it.

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The downturn has driven money that would have been spent in the primary (new) markets, into the secondary (second hand) markets.

Every avenue must be pursued to retain and increase profit. It costs next to nothing to add restrictions the product license, the threat of prosecution is enough keep the public doing as they are told.

We want those customers coming back, year after year.

Why do you think microsoft/games companies and others are luring you onto their "server farms"?

Besides having access to all your personal details/friends/workmates/private letters they can control your access to your own information and eventually charge you what they like per minute whilst online!

This will end up with everyone paying far more than we do now - as the Global beasts dig their talons ever deeper!

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I don't think this is as drastic a decision as at might at first seem.

The business practice of licensing the use of intellectual property to a third party with restrictions for a fee, as distinct from selling it outright, has been around for at least a century. The most widespread example is probably in the film industry, where in around 1907-10, the business model switched from one of producers selling prints of films to exhibitors outright for a flat rate (after which transaction any revenue the exhibitor could make from box office sales was his to keep), from one in which they were rented, either in exchange for a flat fee or a percentage of the box office takings. With various technological refinements, that model is still in use today. Licensing the limited use of your IP is a business model that has been enshrined in copyright and patents legislation going back almost as far as the Act of Anne, and IMO the time is probably past for challenging whether it's a morally legitimate one at all.

The main problem here is that the company that sold the software second hand to the Ebay bloke failed to tell him that they had no right to do so.

I wonder if the music industry will be following suit and banning the sale of 2nd hand CD's to keep profits up?

This could happen for books as well.

With commercial music (and video) recordings that are retailed to consumers, the licence that comes with them typically allows the owner of the recording, whoever he or she may be, to play it on their own private premises and for personal entertainment use without restriction. There's nothing to say that the licence can't be sold on to a third party. Ditto for books. The only things the licences do not allow are activities that could enable the owner of the physical copy to exploit the IP recorded on it for financial gain themselves, most notable public performance and copying. Were the publishers to try to impose a licence condition prohibiting CDs and books to be sold on, they would need to instigate a means of registering and keeping track of who the original purchaser is (which, given that neither medium involves using the Internet, would be very difficult and expensive, even if it's practically possible at all). Furthermore, it would annihilate the market for sales of offline media once it became known that someone who bought a book or a CD could not legally sell it on. Everyone from Ebay to charity shops would be up in arms were such a move to be seriously proposed, and I don't believe that it'll ever happen. That's why media companies and publishers are trying to shift sales from offline delivery to online: because it gives them greater control over their IP.

Edited by The Ayatollah Buggeri
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...iTunes from Apple is pretty restrictive...and eBooks have restrictions .. :rolleyes:

One of the things that put me off Kindle was the knowledge that Amazon have both the technology and the will to wipe the e-books that I thought I had bought off my Kindle. After the stink that was raised when Amazon wiped 1984 (the book) off the Kindle of everyone who thought they had bought a copy, they said that they wouldn't do it again - unless they really had to. Which isn't a great comfort. Of course not being able to back up your purchases goes along with this.

Hit-tip to Audible, whose downloaded books can be copied to any device you own. You just can't give it away to others.


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  • 415 Brexit, House prices and Summer 2020

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